Aviation Finance and International Tax Reform

In addition to tumultuous developments from a political perspective, the year 2016 also saw significant (and somewhat surprising) leaps forward in international tax reform with, amongst other things, the EU Anti-Tax Avoidance Directive unanimously approved for implementation (June 2016) and the Multilateral Convention to Implement Tax Treaty Related measures agreed for signature during November 2016.

It is clear that there is strong world-wide support to reform the current global tax system and such changes bring about complexity and uncertainty for all global businesses and industries, including aviation and aviation finance. In light of these developments Deloitte and Euromoney Institutional Investor Thought Leadership undertook a comprehensive survey to gauge the industry’s perception of the impact of international tax reform on aviation finance. The report contains output from over 400 senior executives surveyed from the aviation finance industry as well as in-depth interviews conducted with senior industry executives and independent experts. The output of this exercise is the attached report on Aviation Finance and International Tax Reform entitled “Game changer, not game over”.

The report provides useful insight into questions such as whether BEPS and related tax reforms will change the current geographic footprint of aircraft lessor operations, who will ultimately bear additional tax cost as a result of international changes (lessors or airlines), which jurisdictions will grow the fastest over the next 5 years as an aircraft leasing location, what action can and should be taken now to prepare for tax changes, Brexit implications, and others.  

Please click here to download full report